Sinn Féin spokesperson on Finance, Pearse Doherty TD, has welcomed data from the European Central Bank which makes clear that corporate profits were a key driver of inflation in 2022.
The Donegal TD called on policymakers to reflect on this fact in the months ahead as workers and families continue to bear the brunt of high inflation.
Teachta Doherty said:
“Today’s comments by the European Central Bank signal an important moment in the inflation debate.
“For the past year, our own government has called for companies to think twice about increasing workers’ pay, warning that it would worsen inflation.
“This mantra has been repeated ad nauseam by policymakers and Government ministers.
“Today, the ECB has acknowledged that corporate profiteering contributed twice as much to price rises compared to wage increases.
“In the ECB’s own words, the effect of profits on prices has been ‘exceptional’ in the recent period.
“The ECB also makes clear that companies have hiked prices under the cloak of higher costs in order to bolster their profit margins.
“This is an extraordinary development and should give pause to policymakers and government.
“Since the cost-of-living crisis began, we have been repeatedly warned of the risk of a wage-price spiral – despite the fact that wages have failed to keep pace with inflation.
“It is now time to consider the risk of a profit-price spiral.
“Today, we also learned that the pay of Irish CEOs soared in 2022, just as inflation soared for households.
“As prices remain high and the cost-of-living crisis continues to bite, it is time to focus on the role of price-gouging and profiteering in the current economic climate.”